Mutual Funds' asset base reaches all-time high of Rs 25 lakh crore

Mutual funds' asset base touched a record Rs 25 lakh crore in August-end, a surge of 8.41 percent over the previous month, on the back of robust inflow in liquid funds and strong participation from retail investors. According to Amfi data, the asset under management (AUM) of the industry, comprising 42 players, was Rs 23.06 lakh crore at the end of July.

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The total asset base of all the fund houses put together was Rs 20.6 lakh crore in August 2018.

The monthly rise in the asset base is mainly due to the industry body's investor awareness campaign and strong participation from retail investors, Amfi chief executive N S Venkatesh said.

Besides, Systematic Investment Plans (SIPs) continue to be the fancy of retail investors and people continue to invest through the route as it allows investors to invest in small amounts periodically instead of a lump sum, he added.

He further said that SIP helps in rupee cost averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market.

The industry's AUM had crossed the milestone of Rs 10 lakh crore for the first time in May 2014 and in a short span of about three years, the asset base had increased more than two folds and crossed Rs 20 lakh crore in August 2017. Now, the industry AUM stood at an all-time high of Rs 25.2 lakh crore at the end of August.

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The surge in the asset base could also be attributed to the staggering inflow of Rs 1.75 lakh crore in mutual fund schemes in August. 

This included Rs 1.71 lakh crore in liquid funds or money market segment which invest in cash assets such as treasury bills, certificates of deposit and commercial paper for a shorter horizon.

Besides, equity schemes attracted over Rs 7,700 crore.

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However, income funds saw an outflow of over Rs 6,500 crore. In addition, gold ETFs continued to see a net outflow of Rs 45 crore.

The industry, which has been witnessing months of continuous inflow, is set for a healthy growth with the proactive regulation from markets regulator Sebi and favourable macro-economic situation, he said.